April 30, 2013

Prof Rick Larrick looks at how political ideology affects how people buy energy-efficient products

When it comes to deciding which light bulb to buy, a label touting the product's environmental benefit may actually discourage politically conservative shoppers.

Dena Gromet and Howard Kunreuther at The University of Pennsylvania's Wharton School and Rick Larrick at Duke University's Fuqua School of Business conducted two studies to determine how political ideology affected a person's choice to buy energy-efficient products in the United States.

The authors suggest that financial incentives or emphasizing energy independence may be better ways to get people to buy energy-efficient products than appealing to environmental concerns because these represent unifying concerns that cross political boundaries.

Their paper, "Political Ideology Affects Energy-Efficient Attitudes and Choices," is published online in Proceedings of the National Academy of Sciences.

"A popular strategy for marketing energy efficiency is to focus on its environmental benefits," said Gromet, the lead author on the studies. "But not everyone values protecting the environment. We were interested in whether promoting the environment could in fact deter some individuals from purchasing energy efficient options that they would have otherwise selected."

The first study surveyed 657 U.S. adults, 49 percent men, ranging in age from 19-81. Participants were given a short description of energy efficiency and answered questions about the psychological value they placed on reducing carbon dioxide emissions to protect the environment, reducing dependence on foreign oil and reducing the financial cost of energy use. They also indicated how much they favored investing in energy-efficient technology. Participants were asked about their political ideology, and how much they identified with different political parties.

The more conservative the participant, the less likely that person was to support investing in energy-efficient technology. The study found that this divide was primarily driven by the lower value that conservatives placed on reducing carbon emissions. The values of energy independence and reducing energy costs had more universal appeal.

The second study involved 210 participants, 61 percent female, who ranged in age from 18 to 66. Again, all participants gave information about their political ideologies. Participants were given $2 to spend on a light bulb and could keep whatever they did not spend.

They were then educated about the benefits of compact fluorescent light (CFL) bulbs over incandescent bulbs. (CFL bulbs last 9,000 more hours and reduce energy costs by 75 percent). Some of the CFL bulbs came with a sticker that said "Protect The Environment" while the others had a blank sticker.

In some cases, the CFL bulb was priced at $1.50, while the incandescent bulb was 50 cents. When the more expensive CFL came with no environmental label, liberals and conservatives selected it at roughly the same high frequency. However, when the more expensive CFL bulb also was accompanied by a "protect the environment" sticker, participants who identified as more politically moderate or conservative were less likely to buy it.

For other participants, both incandescent and CFL bulbs were priced at 50 cents. All but one of these participants bought the CFL bulb regardless of the sticker, indicating that everyone was attracted to a good economic deal regardless of their political leanings.

"The environmental aspect of energy efficiency has an ideologically polarizing impact that can undermine demand for energy-efficient technology, specifically among more politically conservative individuals," Kunreuther said. "On a more positive note, the results of the second study indicate that focusing on the nature of the message coupled with economic incentives should promote investment in energy-efficient products."

"These findings demonstrate that a one-size-fits-all approach is unlikely to be successful for making energy-efficient products appealing to consumers," Larrick said. "People have different energy-related values which can influence their choices, including leading them to reject options that they recognize as having long-term economic benefits. In many cases, a tailored message may be needed to reach different market segments."